The Hindu Business Line : ISA plans umbrella body for entire steel industry

For all practical considerations, it may be termed as a restructuring and realignment of the various lobbying forces of the Indian steel industry, a model similar to what is practised by the steel industry of the US and Japan and bringing them under one umbrella organisation.

The Indian Steel Alliance (ISA) is working out a plan to put up a unified face representing the entire steel industry through the formation of an umbrella association, and not only the segment-specific interests of its members which are hot-rolled steel makers. The exercise is aimed at sourcing funds for future expansions at internationally competitive rates for which it is necessary for the industry to put up a unified face.

According to the ISA, the objective is to create a platform that would accommodate all the existing associations of iron and steel manufacturers such as the Cold Rolled Steel Manufacturer's Association, Indian Induction Furnace Association, Sponge Iron Manufacturers of India and a few others like the rerollers' association, electric arc furnace association etc.

The ISA currently has five members, namely, Steel Authority of India Ltd (SAIL), Rashtriya Ispat Nigam Ltd (RINL), Essar Steel, Jindal Vijaynagar Steel and Ispat Industries. Tata Steel recently left ISA.

Sources said that once a umbrella structure is finalised, something on the lines of `Federation of Indian Steel Industry Associations' or something similar, the next step would be to urge the Government for providing growth opportunities to the industry by providing level playing fields. "In simpler words, the industry would ask for a special steel industry fund or a system through which all new capacities planned would be able to borrow money at the same rate as their counterparts in other countries do at the going international rate which is much lower than the domestic cost of funds," sources said.

A meeting has been convened by the ISA next week in which the promoters of the three private sector companies and the chief executives of the two public sector companies will meet to give a final shape to the plans.

Sources said that while several ideas have been listed to be presented at the meeting, the US model for the steel industry appears to be quite suitable for the exercise. In the US, the Steel Manufacturers' Association of the US functions as a single window for the steel industry and the Government to interact, as it is in Japan through the Japan Steel Manufacturers Association.

However, in India, different associations represent different segments of the steel industry's production chain. And these associations are often at loggerheads with each other like the Corsma and the ISA, which never gets tired of fighting each other and trying to influence Government decisions against each other.